Credit report errors are serious. Having poor credit as a result of a financial hardship is bad enough, but having poor credit due to errors is even worse.
A simple clerical error can seriously affect credit scores resulting in a denial of credit, including a home or auto loan, credit card, apartment or even employment.
Many employers routinely run credit checks on potential employees. Applicants with shaky credit may be denied despite being qualified or having outstanding professional credentials.
It’s a Catch 22: Someone loses their job which results in them being unable to pay their bills — Now they can’t get a job because they couldn’t pay their bills because they lost a job.
Credit report errors continue to be common in 2022
In February 2013, the Federal Trade Commission (FTC) published the results of a survey that revealed just how frequently credit report errors occur:
- One in four Americans found errors on their credit reports that could impact on their credit scores.
- One in 20 consumers had already had their credit score changed by at least 25 points as a result of appealing such errors.
- One in 250 had seen their scores jump by more than 100 points when they challenged an error.
Fast forward almost a decade later in 2022 ⏤ credit report errors continue to be a problem. According to a recent Consumer Reports investigation:
- More than one-third, or 34%, of Americans found at least one error on their credit report.
- Twenty-nine percent found personal information errors and 11% found account information errors.
Consumer Reports asked volunteers to get a copy of their credit report and check for errors and 5,858 did so between Feb. 1 and April 1, 2021.
The credit bureaus maintain files on more than 200 million consumers that means the number of people is in the millions that have credit report errors.
Credit bureaus make it hard to fix credit report errors
A recent report from the Consumer Financial Protection Bureau (CFPB) found that the three major credit bureaus — Equifax, Experian and TransUnion — habitually failed to resolve consumer complaints about credit report errors. From January 2020 to September 2021, the CFPB received more than 700,000 complaints about the three bureaus (Experian, Transunion and Equifax) with the most common complaint incorrect information on credit reports.
In 2021, the credit bureaus provided relief in less than 2 percent of consumer complaints, down from nearly 25 percent in 2019, the CFPB said. “America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” CFPB Director Rohit Chopra said in a release.
How to fix errors on my credit report?
Under the federal Fair Credit Reporting Act, credit bureaus and the companies supplying credit information to them have to correct inaccurate or incomplete information in your files. After you file a dispute, the credit bureau generally has 30 days to investigate.
Here are several actions you can take to prevent credit errors from ruining their lives in 2022:
Monitor your credit files
Consumers should check their credit reports regularly. Not checking your credit regularly can cost you money. Credit report errors are serious. Being unaware of errors may prevent you from being approved for an auto or mortgage loan. Even if you are approved for credit with errors existing on your report, you may end up paying unfavorable interest rates.
AnnualCreditReport.com allows you a free credit report from Experian, Equifax and Transunion once every 12 months. You can also obtain credit reports or enroll in a monitoring service for a price at myfico.com.
Fix credit errors yourself
While there’s nothing wrong with turning to a credit repair company to fix your credit, there’s a good chance the credit bureaus aren’t going to deal with your dispute at all,” said Chi Chi Wu, staff attorney at the National Consumer Law Center.
Credit repair companies frequently bombard the bureaus with complaints. Unfortunately, the credit bureaus have determined that some of those complaints don’t have a legitimate basis for dispute, they’re often boilerplate disputes using the exact same language.
In 2021, the credit bureaus provided relief in less than 2 percent of consumer complaints, down from nearly 25 percent in 2019, the CFPB said.
You can dispute errors directly with the creditor that provided the information or the credit bureaus that report the errors. You should start with the credit bureau first. But don’t expect the credit bureaus to play fair and don’t use a credit bureau’s online dispute resolution service.
Put your disputes in writing, keep copies, and always use certified mail, return receipt requested. Always provide supporting evidence, when available, for any dispute you make in the letter. Supporting evidence can be copies of credit card statements, police reports, court judgments, and so on.
Utilize the Consumer Financial Protection Bureau
If you have filed a dispute with the credit bureaus and it was verified as accurate you may need to take it a step further. Credit bureaus have a duty to investigate but often do not conduct an investigation at all.
If you feel the credit bureaus or the creditor did not properly investigate your dispute make a complaint with the Consumer Financial Protection Bureau. If the CFPB determines that the credit bureau or creditor engaged in any acts or practices that violate the Fair Credit Reporting Act or other federal consumer financial laws, it will take appropriate supervisory and enforcement actions to address violations and seek all appropriate corrective measures.
Don’t be afraid to use the Legal System
As a last resort use the legal system. If you’ve done everything you can to get a genuine error deleted or corrected but have been unsuccessful, you probably should consider consulting an attorney knowledgeable in the Fair Credit Reporting Act. You can find consumer law attorneys listed by State at naca.net.
Put credit report errors and low credit scores behind you. Let 2022 be the year of Excellent Credit!